Note that debt has to be repaid at the end of period 2 and that as well the tax codes (in Canada\ as elsewhere) allow firms to deduct both interest payments and depreciation (in addition to the\ wage bill) from its revenues when computing taxable income.\ How has the existence of debt financing affected the investment function? Does the tax on profits\ affect investment? Does the tax system favour financing by debt over equity (which is equivalent\ to using retained earnings)?